Costa Rica is set to gain a significant foothold in the Middle East with the signing of a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE). This landmark deal, finalized in January 2024, is expected to boost trade between the two nations and open doors for Costa Rican businesses in the dynamic Middle Eastern market.
The agreement, hailed by Costa Rican Foreign Trade Minister Manuel Tovar as a "milestone," marks the first free trade deal Costa Rica has ever struck with a Middle Eastern country. This is particularly significant considering the UAE's position as a major global trade hub and a key player in the region.
The CEPA is designed to dismantle or significantly reduce tariffs on goods traded between the two countries. This will make Costa Rican products more competitive in the UAE market, potentially leading to a surge in exports. The agreement also aims to streamline trade regulations, making it easier for businesses on both sides to navigate the import and export processes.
Beyond just facilitating trade in goods, the CEPA paves the way for increased collaboration between the private sectors of Costa Rica and the UAE. The agreement encourages joint ventures and investments, fostering stronger economic ties between the two nations. This could lead to the creation of new business opportunities and the transfer of knowledge and expertise.
One area ripe for collaboration is Costa Rica's well-established ecotourism industry. The UAE, a popular tourism destination itself, is a potential gateway for Costa Rica to attract high-spending tourists from the Middle East seeking unique and sustainable travel experiences. Costa Rica's expertise in renewable energy could also be of interest to the UAE, which is actively pursuing clean energy solutions.
The impact of the CEPA is expected to extend beyond just economic benefits. Increased trade and investment can foster closer cultural ties between Costa Rica and the UAE. This could lead to a greater exchange of ideas and a deeper understanding between the two nations.
The signing of the CEPA comes at a time of growing trade between Costa Rica and the UAE. Bilateral non-oil trade between the two countries has been steadily increasing, with a 23% jump in 2022 alone. This trend is likely to accelerate with the implementation of the agreement.
While the full impact of the CEPA remains to be seen, there is no doubt that it represents a significant step forward for Costa Rica. The agreement positions the Central American nation to become a major player in the Middle Eastern market, opening doors for its businesses and fostering closer ties with the region.